economics Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analy ...

, the economics of location is the study of strategies used by firms in a

monopolistically competitive Monopolistic competition is a type of imperfect competition such that there are many producers competing against each other, but selling products that are differentiated from one another (e.g. by branding or quality) and hence are not perfec ...

environment in determining where to locate. Unlike a

product differentiation In economics and marketing, product differentiation (or simply differentiation) is the process of distinguishing a product or service from others to make it more attractive to a particular target market. This involves differentiating it from co ...

strategy, where firms make their products different in order to attract customers, an ''economics of location'' strategy is consistent with firms producing similar or identical products.

See also